Ways to wealth: Financial planning in your 40s, 50s, and 60s
(NC) Many Canadians focus on building wealth or reducing debt, but when factoring in expenses that can come up during different life stages— like helping a child pay for education, contributing to a parent's long-term care, or planning a sabbatical — financial goals can be significantly impacted.
“As you mature, so must your financial planning priorities and strategies,” said Lee Bennett, Senior Vice President, TD Wealth Financial Planning. “Recognizing different investing approaches and taking advantage of planning opportunities are critical components to achieving financial security.”
Below, Bennett recommended key money matters to consider in your 40s, 50s, and 60s:
In your 40s: Income and expenses are likely higher than in the past, so now is a good time to review your cash flow and overall financial situation. A lengthy time horizon is good for investing, so remember to think long term – such as retirement planning. Talk to a financial planner, who can help create an investment plan that reflects your goals, needs and risk tolerance.
In your 50s: These are typically your peak earning years. With less debt to pay down, wealth tends to be higher than a decade ago. Set a target retirement date to determine how much money you need to continue saving for a comfortable retirement. Don't forget about unexpected costs, such as home repair—the rule of thumb is to have three to six months' of your income in a safe, liquid account for emergencies.
In your 60s: As you approach retirement, it's time to make some important decisions. Where you spend your retirement, for example, will affect how much income you'll need. Now is also a good time to review your will and estate plans to protect you and your family during retirement and beyond. Consult a financial planner on how to best withdraw your retirement savings.
“It's important to assess your situation, seek professional help, and make a plan—no matter what your age. Review your spending, saving, and investing habits regularly for a secure financial future,” Bennett added.
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